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Strategies & Market Trends : Value Investing

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Jurgis Bekepuris

To: bruwin who wrote (62013)	5/17/2019 9:16:56 AM
From: Spekulatius	2 Recommendations Read Replies (2) of 78656

CVS pays $0.5/ quarter, so that’s a 3.8% dividend yield. Debt is high due to the recent Aetna acquisition. Their interest payments are projected at $3.1-3.5B and operating earnings ( which add back amortization ) ~$15B or roughly ~21% of op. Earnings, which is high but manageable. CVS should generate ~$5B of FCF after dividends, which are designated for debt repayment. This all works unless the business gets impaired. FCF yield on equity is >10%, which is pretty compelling, imo.

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